BUSINESS DEVELOPMENT
GLOBAL WIND ENERGY
“No wind is favorable to the man who does not know to what port he is steering” - Seneca (Roman Philosopher - 5 BC to 65 AD)
AN OLYMPIC HISTORY LESSON The recent Olympics Opening ceremony set the agenda. We start with a green and pleasant land and end up with dark satanic mills in crowded cities powered by fossil fuels. When we consider global energy needs, Danny Boyle’s imaginative history lesson on the transformation of the UK becomes the journey for all emerging economies – except if a more balanced mix of fossil and renewable fuels can be harnessed to power growth without destroying the hand that feeds us all – nature.
WIND ENERGY AGENDA GLOBALLY Over the next few issues we will look at the Wind Energy Agenda globally, exploring common themes as well as highlighting just why energy policies globally will not converge into one-size- fits-all.
GLOBAL ENERGY NEEDS As global population climbs to 9 billion by 2050; energy needs will increase by 100% but the way we produce, distribute and use renewable energy will differ between and within countries. Some will have to build the capacity to reduce dependency on fossil fuels and, reduce the carbon footprint. Elsewhere, in the developing world, where usage and emissions are low the agenda will be about the capacity to adapt to climate change and, different patterns of demand both domestic, commercial and export.
WIND ENERGY Wind energy can supply up to 30% of world electricity – up from 16.5% by 2020 - and already is the major source of power in over 70 countries.
DEMAND DYNAMICS It is not enough to focus on the technology of supply – we have to look at demand dynamics.
For example over 1.6 billion people (1 in 4) in remote rural communities have inadequate or no access to any energy source and use energy for cooking meals, re-charging mobile phone batteries and domestic lighting.
In Rwanda the sun sets at 18:00 and how can you study in the pitch black? In Africa there are 1.6 million deaths due to kerosene exposure over cooking stoves. Then there are small businesses that are paying through the nose for energy and, run huge risks on hard won exports because of intermittent supply - try running a cold chain under those circumstances. It is expensive to be poor.
BOTTOM UP PERSPECTIVE There is a bottom up perspective based on affordable access to power as well as a top down agenda driven by regulatory and special interests.
Fundamentally, global regions start from very different bases. Power shortages are costing Pakistan up to 4% of GDP growth. Africa has 147 GW of installed capacity – a level that China installs every two years and back-up generators cost up to 5% of GDP. There is change in the pipeline.
In 2010 Morocco was a 95% energy dependent country but by 2020 plans to generate 42% from renewable sources – with an estimated 15% coming from wind. Each country requires different solutions.
A SHIFT IN THINKING In rural areas affordability and scalability is key. In urban areas, the focus needs to be on efficiency, making use of good practice and innovation elsewhere. This means a shift in thinking from a national grid system like the terrestrial telephone network to a more hybrid system embracing a mix of grid; semi grid and off grid solutions.
LOCATION MATTERS • Is the country rich in resources or does it have to import fuel to survive?
• Has the country built an industry that is competitive and can use enough energy to drive critical mass?
In the developing world we need to factor in stakeholder values as well.
Already, valuable insights are emerging in key wind energy markets:
• Northern Europe – manufacturing innovation is a key strength
• Southern Europe – Navarre in Spain, with over 70% of its energy generated by wind is a Region that can be a Case Study elsewhere
• China – experience to date highlights the need to cut costs along the supply chain
• Indian Ocean – a focus local small- scale solutions can reap huge rewards
• South America – Renewables is playing a huge role in the Energy mix
• Africa – all to play for
Supply chains compete; not companies or countries.
A GLOBAL MARKET Ten International companies manage over 80 per cent of wind energy projects and, they have a presence in multiple markets. Those companies that want to play ball as tier 1,2 or 3 suppliers have to understand that this is a global market and this means knowing more about developments elsewhere. Let’s look at some of these potential markets and business opportunities to go for.
Rob Bell is CEO of Archomai Consulting and Visiting Reader at Aberdeen Business School.
Rob Bell Archomai
www.archomai.co.uk
www.windenergynetwork.co.uk
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